----

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| HOLLOMAN ENERGY  CORPORATION                               |
|------------------------------------------------------------|
| (Exact      name of registrant as specified in itscharter) |

| Nevada                               |   | 77-0643398               |
|--------------------------------------|--------|--------------------------|
| (State      or other jurisdiction of |   | (I.R.S.      Employer    |
| incorporation      or organization)  |   | Identification      No.) |

|   | Large accelerated      filer                                                                   | o | Accelerated      filer                  | o      |
|--------|-------------------------------------------------------------------------------------------------------------------------|---|--------------------------------------------------------------------------------------|--------|
|   | Non-accelerated      filer      (Do not      check if a smaller reporting company)   | o | Smaller reporting      company          | þ |

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|   | ● | The      impact of the current economic recession and changes in consumer and      business consumption habits; |
|--------|---------|-----------------------------------------------------------------------------------------------------------------|

|   | ● | our      ability to finance our businessplan; |
|--------|---------|-----------------------------------------------|

|   | ● | our      ability to deal effectively with competition and manage our      growth; |
|--------|---------|-----------------------------------------------------------------------------------|

|   | ● | the      success or commercial viability of our exploration and drilling      plans; |
|--------|---------|--------------------------------------------------------------------------------------|

|   | ● | our      ability to effectively judge acquisition opportunities and integrate      acquired assets. |
|--------|---------|-----------------------------------------------------------------------------------------------------|

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| License      |   | Description of Minimum Work      Obligation                 |   | Date of Required  Completion |
|--------------|--------|-------------------------------------------------------------|--------|------------------------------|
| PEL      112 |   | Reprocessing      of seismic data on hand – 2D        |   | June      11, 2010           |
| PEL      112 |   | Acquisition      of new seismic data – 2D (100 sq km) |   | June      11, 2011           |
| PEL      112 |   | Geological      and geophysical testing                     |   | June      11, 2012           |
| PEL      112 |   | Drill      one well                                         |   | June      11, 2013           |
| PEL      444 |   | Reprocessing      of seismic data on hand – 2D        |   | June      11, 2010           |
| PEL      444 |   | Acquisition      of new seismic data – 2D (200 sq km) |   | June      11, 2011           |
| PEL      444 |   | Geological      and geophysical testing                     |   | June      11, 2012           |
| PEL      444 |   | Drill      one well                                         |   | June      11, 2013           |

|   | 1. | Fund      the costs required to drill, and if warranted, complete three wells on the      PEL 112 within the timeframes required by the permit work program;      and |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | Pay      us a 1.33% overriding royalty on gross revenues generated from the sale of      any oil or gas produced from wells drilled on the PEL  112. |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Quarter               |   | High |   |   | Low    |   |
|-----------------------|--------|------|--------|--------|--------|--------|
| 4th      Quarter 2009 |   | $    | 0.60   |   |   | $      | 0.28 |   |
| 3rd      Quarter 2009 |   | $    | 0.64   |   |   | $      | 0.35 |   |
| 2nd      Quarter 2009 |   | $    | 0.38   |   |   | $      | 0.02 |   |
| 1st      Quarter 2009 |   | $    | 0.07   |   |   | $      | 0.02 |   |
| 4th      Quarter 2008 |   | $    | 0.25   |   |   | $      | 0.04 |   |
| 3rd      Quarter 2008 |   | $    | 0.43   |   |   | $      | 0.17 |   |
| 2nd      Quarter 2008 |   | $    | 0.49   |   |   | $      | 0.04 |   |
| 1st      Quarter 2008 |   | $    | 0.40   |   |   | $      | 0.05 |   |

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| Name                  |   | Age |   | Position                                                                                        |
|-----------------------|--------|-----|--------|-------------------------------------------------------------------------------------------------|
| Mark      Stevenson   |   | 55  |   | Chairman      of the Board of Directors, President, Chief Executive Officer, and      Secretary |
| Eric      Prim        |   | 51  |   | Chief      Operating Officer, and Director                                                      |
| Robert      Wesolek   |   | 53  |   | Chief      Financial Officer, and Treasurer                                                     |
| J.      Douglas Brown |   | 57  |   | Director                                                                                        |
| Keith      Macdonald  |   | 53  |   | Director                                                                                        |

----

|    |   |                 |   | Appointed      (A)  |   |                                                  |
|---------|--------|----------------------|--------|---------------------|--------|-------------------------------------------------------|
|    |   |                 |   | to      or          |   |                                                  |
|    |   |                 |   | Resigned      (R)   |   | Positions      Appointed to                           |
| Date    |   | Name                 |   | from      Positions |   | Positions      Resigned From                          |
| 1/4/08  |   | Grant      Petersen  |   | A                   |   | President,      Chief Executive Officer and Treasurer |
| 1/29/09 |   | David      Lewis     |   | R                   |   | Director                                              |
| 7/1/09  |   | Grant      Petersen  |   | R                   |   | President,      Chief Executive Officer               |
| 7/1/09  |   | Mark      Stevenson  |   | A                   |   | President,      Chief Executive Officer               |
| 7/22/09 |   | Eric      Prim       |   | A                   |   | Chief      Operating Officer                          |
| 8/4/09  |   | Grant      Petersen  |   | R                   |   | Chief      Financial Officer and Treasurer            |
| 8/4/09  |   | Robert      Wesolek  |   | A                   |   | Chief      Financial Officer and Treasurer            |
| 8/4/09  |   | Keith      Macdonald |   | A                   |   | Director                                              |
|    |   |                 |   |                |   |                                                  |

----

| Name      and                 |   |   |   |   |           |   |   |   |           | Stock   |   |   | Option         |   |   | All      Other |           |   |   |   |
|-------------------------------|--------|--------|--------|--------|----------------|--------|--------|--------|----------------|---------|--------|--------|----------------|--------|--------|----------------|----------------|--------|--------|--------|
| Principal                     |   |   |   | Salary |           |   | Bonus  |   |           | Awards  |   |   | Awards         |   |   | Compensation   |           |   | Total  |   |
| Position                      |   | Year   |   | ($)    |           |   | ($)    |   |           | ($) (4) |   |   | ($) (4)        |   |   | ($) (2)        |           |   | ($)    |   |
| Mark      Stevenson,          |   |   |   |   |           |   |   |   |           |    |   |   |           |   |   |           |           |   |   |   |
| Chief      Executive          |   | 2008   |   |   | –– |   |   |   | –– |    |   |   | –– |   |   |           | –– |   |   |   | –– |   |   | $ | –– |   |
| Officer                       |   | 2009   |   |   | –– |   |   |   | –– |    |   |   | –– |   |   |           | –– |   |   |   | –– |   |   |   | –– |   |
| Grant      Petersen (1), |   |   |   |   |           |   |   |   |           |    |   |   |           |   |   |           |           |   |   |   |   |   |   |   |   |   |
| Chief      Executive          |   | 2008   |   |   | 175,000        |   |   |   | –– |    |   |   | –– |   |   |           | –– |   |   |   | –– |   |   |   | 175,000 |   |
| and      Financial            |   | 2009   |   |   | 60,000         |   |   |   | –– |    |   |   | 14,000         |   |   |           | 300,000        |   |   |   | –– |   |   |   | 374,000 |   |
| Officer                       |   |   |   |   |           |   |   |   |           |    |   |   |           |   |   |           |           |   |   |   |   |   |   |   |   |   |
| Robert      Wesolek(2),       |   |   |   |   |           |   |   |   |           |    |   |   |           |   |   |           |           |   |   |   |   |   |   |   |   |   |
| Chief      Financial          |   | 2008   |   |   | –– |   |   |   | –– |    |   |   | –– |   |   |           | –– |   |   |   | 273,000 |   |   |   | 273,000 |   |
| Officer                       |   | 2009   |   |   | 123,075        |   |   |   | –– |    |   |   | 14,000         |   |   |           | 300,000        |   |   |   | 138,375 |   |   |   | 575,450 |   |
| Eric      Prim(3),            |   |   |   |   |           |   |   |   |           |    |   |   |           |   |   |           |           |   |   |   |   |   |   |   |   |   |
| Chief      Operating          |   | 2008   |   |   | –– |   |   |   | –– |    |   |   | –– |   |   |           | –– |   |   |   | –– |   |   |   | –– |   |
| Officer                       |   | 2009   |   |   | –– |   |   |   | –– |    |   |   | 28,000         |   |   |           | 600,000        |   |   |   | –– |   |   |   | 628,000 |   |

| ——————— |
|---------------------------------------------------|

| (1) | Mr. Petersen      became our Chief Executive and Financial Officer on January 4, 2008      and resigned from those positions on July 1, 2009 and August 4, 2009,      respectively. Mr. Petersen’s was compensated in the form of      management fees for services rendered in the normal course of operations.      The amount of the fees was established and approved by our Board of      Directors. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Mr. Wesolek      became our Chief Financial Officer on August 4, 2008. During 2008 and      a portion of 2009, we paid Mr. Wesolek consulting fees totaling $273,000      and $138,375, respectively. As of December 31, 2009, Mr. Wesolek had      voluntarily deferred $24,024 of the amounts payable to him. During January      2010, he converted $10,000 of those deferred fees into shares of our      common stock at a market price of $0.48 per share. Mr. Wesolek is      compensated in the form of fees for services rendered in the normal course      of operations. The amount of the fees was established and approved by our      Board of Directors. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Compensation      for Eric Prim includes stock awards in the amount $14,000 and option      awards in the amount of $300,000 earned in his capacity as one of our      Directors. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Stock      and option awards are valued at fair market value. The assumptions applied      in our calculation of the value of those awards are set forth in Note 7 to      our financial statements. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                   |   | Number      of securities underlying unexercised      options |           |   |             |   |           |
|----------------------------------------|--------|---------------------------------------------------------------|----------------|--------|------------------|--------|----------------|
|                                   |   |                                                          | (#)            |   |             |   | (#)            |   |   | Option      Exercise |   | Option      Expiration |
| Name                                   |   | Exercisable                                                   |           |   | Unexercisable(1) |   |           | Price |   | Date |
|                                   |   |                                                          |           |   |             |   |           |   |   |   |   |   |
| Eric      Prim                         |   |                                                          |           |   |             |   |           |   |   |   |   |   |
| Stock      Option A                    |   |                                                          | 300,000        |   |             |   | –– |   |   | $ | 0.70 |   | August      15, 2012 |
| Stock      Option B                    |   |                                                          | –– |   |             |   | 300,000        |   |   | $ | 0.80 |   | August      15, 2012 |
| Stock      Option C                    |   |                                                          | –– |   |             |   | 300,000        |   |   | $ | 1.00 |   | August      15, 2014 |
|     Stock Option D      |   |                                                          | –– |   |             |   | 300,000        |   |   | $ | 1.20 |   | August      15, 2014 |
| Robert Wesolek                         |   |                                                          |           |   |             |   |           |   |   |   |   |   |   |
| Stock      Option A                    |   |                                                          | 150,000        |   |             |   | –– |   |   | $ | 0.70 |   | August      15, 2012 |
| Stock      Option B                    |   |                                                          | –– |   |             |   | 150,000        |   |   | $ | 0.80 |   | August      15, 2012 |
| Stock      Option C                    |   |                                                          | –– |   |             |   | 150,000        |   |   | $ | 1.00 |   | August      15, 2014 |
|     Stock Option D      |   |                                                          | –– |   |             |   | 150,000        |   |   | $ | 1.20 |   | August      15, 2014 |
| J.Douglas      Brown                   |   |                                                          |           |   |             |   |           |   |   |   |   |   |   |
| Stock      Option A                    |   |                                                          | 300,000        |   |             |   | –– |   |   | $ | 0.70 |   | August      15, 2012 |
| Stock      Option B                    |   |                                                          | –– |   |             |   | 300,000        |   |   | $ | 0.80 |   | August      15, 2012 |
|     Stock Option C      |   |                                                          | –– |   |             |   | 300,000        |   |   | $ | 1.00 |   | August      15, 2014 |
|     Stock Option D      |   |                                                          | –– |   |             |   | 300,000        |   |   | $ | 1.20 |   | August      15, 2014 |
| Keith      Macdonald                   |   |                                                          |           |   |             |   |           |   |   |   |   |   |   |
| Stock      Option A                    |   |                                                          | 300,000        |   |             |   | –– |   |   | $ | 0.70 |   | August      15, 2012 |
| Stock      Option B                    |   |                                                          | –– |   |             |   | 300,000        |   |   | $ | 0.80 |   | August      15, 2012 |
| Stock      Option C                    |   |                                                          | –– |   |             |   | 300,000        |   |   | $ | 1.00 |   | August      15, 2014 |
|          Stock Option D |   |                                                          | –– |   |             |   | 300,000        |   |   | $ | 1.20 |   | August      15, 2014 |

| (1) | The      vesting date for each Stock Option B and Stock Option C is August 15,      2010. The vesting date for each Stock Option D is August 15,      2011. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

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| Plan      category                                              | Number      of securities to be issued upon exercise of outstanding options, warrants      and rights | Weighted-average      exercise price of outstanding options, warrants and rights | Number      of securities remaining available for future issuance under equity      compensation plans (excluding securities reflected in column      (a)) |
|-----------------------------------------------------------------|-------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                            | (a)                                                                                                   | (b)                                                                              | (c)(1)                                                                                                                                                     |
| Equity      compensation plans approved by security holders     | ––                                                                                        | ––                                                                   | ––                                                                                                                                             |
| Equity      compensation plans not approved by security holders | 4,800,000                                                                                             | $   0.93                                                          | 2,500,000                                                                                                                                                  |
| Total                                                           | 4,800,000                                                                                             | $   0.93                                                          | 2,500,000                                                                                                                                                  |

|   | ——————— |
|--------|---------------------------------------------------|

| Name                       |   | Shares |   |
|---------------------------------|--------|--------|--------|
|                            |   |   |   |
| Eric      Prim        |   |   | 50,000 |   |
| Robert      Wesolek   |   |   | 25,000 |   |
| J. Douglas      Brown      |   |   | 50,000 |   |
| Keith    McDonald               |   |   | 50,000 |   |
| Grant      Petersen   |   |   | 25,000 |   |

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|                 |   | Fees      earned or      paid in cash |           |   | Stock      Awards |   |   | Option Awards(1) |   |   | All      Other Compensation |   |   | Total  |           |
|----------------------|--------|---------------------------------------|----------------|--------|-------------------|--------|--------|------------------|--------|--------|-----------------------------|--------|--------|--------|----------------|
|  Name           |   | ($)                                   |           |   | ($)               |   |   | ($)              |   |   | ($) (2)                     |   |   | ($)    |           |
| J.Douglas      Brown |   |                                  | –– |   |              |   | 28,000 |             |   |   | 600,000                     |   |   |   | –– |   |   |   | 628,000 |   |
| Keith      Macdonald |   |                                  | –– |   |              |   | 28,000 |             |   |   | 600,000                     |   |   |   | –– |   |   |   | 628,000 |   |

| (1)   | Mr.      Brown and Mr. Macdonald each had 1,200,000 option awards outstanding at      December 31, 2009. |
|-----------------|----------------------------------------------------------------------------------------------------------|

| (2)   | On      August 15, 2009, we issued our officers and directors fractional      participation in a 2% net revenue interest in wells drilled by us on lands      in the Cooper Basin. These participation units represent a 0.454% interest      in our Cooper Basin revenues, after all royalties, exploration expenses,      operating costs and capital investments associated with the Cooper Basin      have been recovered. In our opinion no value can be assigned to these      revenue interests, as any valuation is  non-estimable. |
|-----------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Name      and address of  beneficial owner      |   | Number      ofShares      (1) |       |            | Percentage      ofCommon      Stock |   |
|-----------------------------------------------------------|--------|-------------------------------|------------|-----------------|-------------------------------------|--------|
| Mark      Stevenson                                       |   | 58,929,310                    | (2&3)  |            |                                | 49.68  | % |
| Chairman      of the Board, Chief Executive Officer,      |   |                          |       |            |                                |   |   |
| President      and Secretary                              |   |                          |       |            |                                |   |   |
| 333      North Sam Houston Parkway East                   |   |                          |       |            |                                |   |   |
| Suite      600                                            |   |                          |       |            |                                |   |   |
| Houston,      TX  77060                         |   |                          |       |            |                                |   |   |
| Eric      Prim                                            |   |                          | 18,261,701 | (4)   |                                |   | 16.98 | % |
| Chief      Operating Officer and Director                 |   |                          |       |            |                                |   |   |   |
| 4901      Polo Parkway                                    |   |                          |       |            |                                |   |   |   |
| Midland,      Texas 79705                                 |   |                          |       |            |                                |   |   |   |
| Robert      Wesolek                                       |   |                          | 3,006,250  |            |                                |   | 2.80 | % |
| Chief      Financial Officer and Treasurer                |   |                          |       |            |                                |   |   |   |
| 3      Farther Point                                      |   |                          |       |            |                                |   |   |   |
| Houston,      TX  77024                         |   |                          |       |            |                                |   |   |   |
| J.      Douglas Brown                                     |   |                          | 6,055,293  |            |                                |   | 5.52 | % |
| Director                                                  |   |                          |       |            |                                |   |   |   |
| 16E      Les Roseyres, Gron1882                           |   |                          |       |            |                                |   |   |   |
| Vaud,      Switzerland                                    |   |                          |       |            |                                |   |   |   |
| Keith      Macdonald                                      |   |                          | 687,500    | (5)        |                                |   | 0.64 | % |
| Director                                                  |   |                          |       |            |                                |   |   |   |
| 203      Heritage Place                                   |   |                          |       |            |                                |   |   |   |
| Calgary,      AB, Canada  T3Z 3P3               |   |                          |       |            |                                |   |   |   |
| Grant      Petersen                                       |   |                          | 4,548,827  | (6)   |                                |   | 4.2 | % |
| 482      – 1027 Davie Street                        |   |                          |       |            |                                |   |   |   |
| Vancouver,      BC, Canada                                |   |                          |       |            |                                |   |   |   |
| Holloman      Oil & Gas Limited                       |   |                          | 17,237,500 | (7)        |                                |   | 16.07 | % |
| 9,      88 Forrest Street                                 |   |                          |       |            |                                |   |   |   |
| Cottesloe,      WA  6011                        |   |                          |       |            |                                |   |   |   |
| Australia                                                 |   |                          |       |            |                                |   |   |   |
| Holloman      Corporation                                 |   |                          | 57,926,421 | (7)        |                                |   | 49.00 | % |
| 333      North Sam Houston Parkway East                   |   |                          |       |            |                                |   |   |   |
| Suite      600                                            |   |                          |       |            |                                |   |   |   |
| Houston,      Texas 77060                                 |   |                          |       |            |                                |   |   |   |
| All      Officers and Directors as a group (four persons) |   |                          | 74,251,380 | (4)        |                                |   | 60.41 | % |

| (1) | Includes      shares which may be acquired on the exercise of options or warrants listed      below, all of which were exercisable as of December 31,      2009. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|                      |   | Shares      Issuable Upon            |   |                |   |                 |
|---------------------------|--------|--------------------------------------|--------|---------------------|--------|----------------------|
| Name                      |   | Exercise  of      Warrants |   | Exercise      Price |   | Expiration      Date |
| Mark      Stevenson       |   | 196,078                              |   | $0.70               |   | 9/30/2011            |
| Mark      Stevenson       |   | 196,078                              |   | $2.00               |   | 9/30/2011            |
| Mark      Stevenson       |   | 20,834                               |   | $0.80               |   | 12/17/2012           |
| Eric      Prim            |   | 300,000                              |   | $0.70               |   | 8/15/2012            |
| Eric      Prim            |   | 26,042                               |   | $0.80               |   | 12/17/2012           |
| Robert      Wesolek       |   | 150,000                              |   | $0.70               |   | 8/15/2012            |
| Robert      Wesolek       |   | 10,442                               |   | $0.80               |   | 12/17/2012           |
| J.      Douglas Brown     |   | 1,078,431                            |   | $0.70               |   | 9/30/2011            |
| J.      Douglas Brown     |   | 1,078,431                            |   | $2.00               |   | 9/30/2011            |
| J.      Douglas Brown     |   | 300,000                              |   | $0.70               |   | 8/15/2012            |
| Keith      Macdonald      |   | 300,000                              |   | $0.70               |   | 8/15/2012            |
| Keith      Macdonald*     |   | 50,000                               |   | $0.80               |   | 12/17/2012           |
| Grant      Petersen**     |   | 392,157                              |   | $0.70               |   | 9/30/2011            |
| Grant      Petersen**     |   | 392,157                              |   | $2.00               |   | 9/30/2011            |
| Grant      Petersen       |   | 150,000                              |   | $0.70               |   | 8/15/2012            |
| Grant      Petersen***    |   | 55,785                               |   | $0.80               |   | 12/17/2012           |
| Holloman      Corporation |   | 5,098,040                            |   | $0.70               |   | 9/30/2011            |
| Holloman      Corporation |   | 5,098,040                            |   | $0.70               |   | 9/30/2011            |
| Holloman      Corporation |   | 781,250                              |   | $0.80               |   | 12/17/2012           |

| * | Warrants      are held of record by an entity controlled by Mr.    Macdonald. |
|---|-------------------------------------------------------------------------------|

| ** | Warrants      are held of record by Mr. Petersen’swife. |
|----|--------------------------------------------------------------------|

| *** | Warrants      are held of record by an entity controlled by      Mr. Petersen. |
|-----|-------------------------------------------------------------------------------------|

| (2) | Includes      429,745 shares held directly, 160,154 shares held indirectly by entities      controlled by Mr. Stevenson, and shares issuable upon the exercise of      warrants. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Mark      Stevenson is the President and Chief Executive Officer of Holloman      Corporation. Holloman Corporation owns all of the outstanding shares of      Holloman Oil & Gas. Mr. Stevenson is the president of Holloman      Oil & Gas. Accordingly, Mr.      Stevenson’s numbers includes shares owned of record by Holloman Oil &      Gas and Holloman Corporation as well as shares issuable upon the exercise      of warrants held by HollomanCorporation. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | Eric      Prim is a Director of Holloman Oil & Gas. Accordingly, Mr. Prim’s      numbers includes shares owned of record by Holloman Oil &      Gas. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (5) | All      shares held indirectly by an entity controlled by Mr. Macdonald, and      shares issuable upon the exercise ofwarrants. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Includes      shares held by an entity controlled by Mr. Petersen, shares held by      Mr. Peterson’s wife, and shares issuable upon the exercise of      warrants. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (6) | Shares      held by Holloman Corporation include shares owned of record by Holloman      Oil & Gas, its wholly-ownedsubsidiary. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------|

----

|     |   | Number      of       |   |                                                                                                                                                                                                                     |
|----------|--------|----------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| Date     |   | Shares      Acquired |   | Description  of      Transaction                                                                                                                                                                               |
| 09-24-07 |   | 55,000               |   | Open      market purchase                                                                                                                                                                                                |
| 10-01-07 |   | 27,000               |   | Open      market purchase                                                                                                                                                                                                |
| 11-21-07 |   | 210,126              |   | Acquisition      of Holloman Petroleum Pty. Ltd. Mr. Stevenson, as well as a limited      liability company and two trusts controlled by Mr. Stevenson, were      shareholders of Holloman Petroleum Pty. Ltd. |
| 09-17-08 |   | 60,000               |   | Open      market purchase                                                                                                                                                                                                |
| 10-06-08 |   | 196,078              |   | (2)                                                                                                                                                                                                                      |
| 12-23-09 |   | 41,667               |   | (3)                                                                                                                                                                                                                      |

|     |   | Number      of       |   |                                                                                                                  |
|----------|--------|----------------------|--------|-----------------------------------------------------------------------------------------------------------------------|
| Date     |   | Shares      Acquired |   | Description  of      Transaction                                                                            |
| 9-24-07  |   | 59,000               |   | Open      market purchases                                                                                            |
| 11-21-07 |   | 377,076              |   | Acquisition      of Holloman Petroleum Pty. Ltd. Mr. Prim was a shareholder of      Holloman Petroleum Pty. Ltd. |
| 07-14-09 |   | 100,000              |   | Open      market purchase                                                                                             |
| 08-04-09 |   | 50,000               |   | Open      market purchase                                                                                             |
| 08-17-09 |   | 50,000               |   | Stock      Bonus Grant (see Item 11 of this report)                                                                   |
| 08-19-09 |   | 10,000               |   | Open      market purchase                                                                                             |
| 12-24-09 |   | 52,083               |   | (3)                                                                                                                   |

|     |   | Number      of       |   |                                                |
|----------|--------|----------------------|--------|-----------------------------------------------------|
| Date     |   | Shares      Acquired |   | Description  of      Transaction          |
| 3-07-08  |   | 3,000,000            |   | (1)                                                 |
| 08-17-09 |   | 25,000               |   | Stock      Bonus Grant (see Item 11 of this report) |
| 12-24-09 |   | 20,833               |   | (3)                                                 |

|     |   | Number      of       |   |                                               |
|----------|--------|----------------------|--------|----------------------------------------------------|
| Date     |   | Shares      Acquired |   | Description  of      Transaction         |
| 03-07-08 |   | 2,460,000            |   | (1)                                                |
| 10-06-08 |   | 1,078,431            |   | (2)                                                |
| 08-04-09 |   | 10,000               |   | Open      market purchase                          |
| 08-17-09 |   | 50,000               |   | Stock      Bonus Grant (see Item 11 of thisreport) |

|     |   | Number      of       |   |                                                |
|----------|--------|----------------------|--------|-----------------------------------------------------|
| Date     |   | Shares      Acquired |   | Description  of      Transaction          |
| 07-04-09 |   | 137,500              |   | Open      market purchase                           |
| 08-17-09 |   | 50,000               |   | Stock      Bonus Grant (see Item 11 of this report) |
| 09-03-09 |   | 50,000               |   | Open      market purchase                           |
| 12-23-09 |   | 100,000              |   | (3)                                                 |

----

|     |   | Number      of       |   |                                                |
|----------|--------|----------------------|--------|-----------------------------------------------------|
| Date     |   | Shares      Acquired |   | Description  of      Transaction          |
| 03-07-08 |   | 4,000,000            | *      | (1)                                                 |
| 09-17-08 |   | 30,000               |   | Open      market purchase                           |
| 10-06-08 |   | 392,157              | *      | (2)                                                 |
| 08-17-09 |   | 25,000               |   | Stock      Bonus Grant (see Item 11 of this report) |
| 12-23-09 |   | 111,571              |   | (3)                                                 |

| * | Held      of record by Mr. Petersen’s wife and an entity affiliated with      Mr. Petersen |
|---|------------------------------------------------------------------------------------------------------------|

|     |   | Number      of       |   |                                                                                                                                             |
|----------|--------|----------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------|
| Date     |   | Shares      Acquired |   | Description  of      Transaction                                                                                                       |
| 11-21-07 |   | 17,237,500           |   | Acquisition      of Holloman Petroleum Pty. Ltd. Holloman Oil & Gas Ltd. was the      principal shareholder of Holloman Petroleum Pty.  Ltd. |

|     |   | Number      of       |   |                                                                                 |
|----------|--------|----------------------|--------|--------------------------------------------------------------------------------------|
| Date     |   | Shares      Acquired |   | Description  of      Transaction                                           |
| 03-07-08 |   | 15,000,000           |   | (1)                                                                                  |
| 09-30-08 |   | 193,050              |   | Conversion      of $50,000 in administrative service fees at $0.26 per    share      |
| 10-06-08 |   | 5,098,040            |   | (2)                                                                                  |
| 12-31-08 |   | 1,812,783            |   | Conversion      of $150,000 in administrative service fees at $0.083 per    share    |
| 06/02/09 |   | 6,045,218            |   | Conversion      of  $604,522 of indebtedness at FMV ($0.10 per      share) |
| 12-23-09 |   | 1,562,500            |   | (3)                                                                                  |

| (1) | Shares      were purchased in a private transaction from Adrian Crimeni, our former      President and largest shareholder. |
|-----|-----------------------------------------------------------------------------------------------------------------------------|

| (2) | Shares      were purchased from us in a private offering. The shares were sold as part      of a unit and at a price of $0.255 per unit. Each unit consisted of one      share of our restricted common stock, one Series A warrant and one      Series B warrant. Each Series A warrant entitles the holder to      purchase one share of our restricted common stock at a price of $0.70 per      share. Each Series B warrant entitled the holder to purchase one      share of our restricted common stock at a price of $2.00 per share. The      Series A and B warrants expire on September 30,      2011. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Shares      were purchased from us in a private offering of investment units. The      investment units were priced at $0.48 each and consisted of one share of      our common stock, and one stock purchase warrant. Each stock purchase      warrant entitles the holder to purchase one half share of our common stock      at a price of $0.80 per share until December 17,  2012. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                           |   | 2009   |   |   | 2008   |   |
|--------------------------------|--------|--------|--------|--------|--------|--------|
| Audit-related      fees   |   | $      | 66,000 |   |   | $      | 77,000 |   |
| Tax      fees                  |   |   | 9,500  |   |   |   | 5,000 |   |
| Total      |   | $      | 75,500 |   |   | $      | 82,000 |   |

----

----

| Exhibit Number |   | Description      of Exhibit                                                                                                                                                                                             |
|---------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 3.1                 |   | Articles      of Incorporation(1)                                                                                                                                                                                       |
| 3.2                 |   | Corporate      Bylaws(1)                                                                                                                                                                                                |
| 10.1                |   | Share      Exchange Agreement between Endeavor Energy Corporation, First Endeavor      Holdings Inc .and Endeavor Canada Corporation(2)                                                                                 |
| 10.2                |   | Agreement      between Endeavor Energy Corporation and Holloman Petroleum Pty. Ltd. for      the purchase of assets and exchange of shares(3)                                                                           |
| 10.3                |   | Option      Agreement dated February 1, 2008 between Holloman Energy Corporation      and Cameron King for an exchange of shares of Endeavor Canada      Corporation(4)                                            |
| 10.4                |   | Notice      of Option Exercise dated February 15, 2008 relating to the Option      Agreement between Holloman Energy Corporation and Cameron King for an      exchange of shares of Endeavor Canada Corporation(4) |
| 10.5                |   | Farm      Out Commitment Agreement between Holloman Energy Corporation and Holloman      Oil & Gas, Ltd.      (4)                                                                                                   |
| 14.1                |   | Code      of Ethics for Principal Executive and Senior Financial Officers(5)                                                                                                                                            |
| 21.1                |   | As      of March 15, 2009 our subsidiaries were:                                                                                                                                                                   |
|                |   |   First      Endeavor Holdings Inc. (100% Owned)                                                                                                                                                              |
|                |   |   Holloman      Petroleum Pty. Ltd. (100% Owned)                                                                                                                                                              |
|                |   |   Endeavor      Exploration Pty. Ltd. (100% Owned)                                                                                                                                                            |
| 31.1                |   | Rule 13a-14(a)      Certifications                                                                                                                                                                                 |
| 31.2                |   | Rule 13a-14(a)      Certifications                                                                                                                                                                                 |
| 32                  |   | Section 1350      Certifications                                                                                                                                                                                   |

|   | ——————— |
|--------|---------------------------------------------------|

| (1) | Previously      filed with our Form SB-2 on January 23, 2006 and incorporated by      reference. |
|-----|------------------------------------------------------------------------------------------------------------|

| (2) | Previously      filed with our Form 8-K on August 9, 2007 and incorporated by      reference. |
|-----|---------------------------------------------------------------------------------------------------------|

| (3) | Previously      filed with our Form 8-K on November 29, 2007 and incorporated by      reference. |
|-----|------------------------------------------------------------------------------------------------------------|

| (4) | Previously      filed with our Form 10-KSB on April 15, 2008 and incorporated by      reference. |
|-----|------------------------------------------------------------------------------------------------------------|

| (5) | Previously      filed with our Form 10-KSB/A on April 26, 2007 and incorporated      by reference. |
|-----|--------------------------------------------------------------------------------------------------------------|

----

|                     | HOLLOMAN      ENERGY CORPORATION |
|--------------------------|----------------------------------|
| Date:March      31, 2010 |                             |   |
|                     |                             |   |
|                     | By:                              | /s/ Mark      Stevenson |
|                     |                             | Mark      Stevenson, President      and Principal Executive Officer |
|                     |                             |   |
|                     | By:                              | /s/ Robert      Wesolek |
|                     |                             | Robert      Wesolek, Principal      Financial and Accounting Officer |

| Signature                       |   | Date                |
|---------------------------------|--------|---------------------|
|                            |   |                |
| /s/ Mark      Stevenson    |   | March      31, 2010 |
| Mark      Stevenson, Director   |   |                |
|                            |   |                |
| /s/ J.      Douglas Brown  |   | March      31, 2010 |
| J.      Douglas Brown, Director |   |                |
|                            |   |                |
| /s/ Eric      Prim         |   | March      31, 2010 |
| Eric      Prim, Director        |   |                |
|                            |   |                |
| /s/ Keith      Macdonald,  |   | March      31, 2010 |
| Keith      Macdonald, Director  |   |                |

----

| Vancouver,      CanadaMarch 31, 2010 | DALE MATHESON CARR-HILTON LABONTE LLPCHARTERED      ACCOUNTANTS |
|--------------------------------------|-----------------------------------------------------------------|

----

| HOLLOMAN      ENERGY CORPORATION                 |
|--------------------------------------------------|
| (An      Exploration Stage Company)              |
| CONSOLIDATED      BALANCE SHEETS  (Audited) |

|                                                                                     |   | December      31, 2009 |        |   | December      31, 2008 |   |
|------------------------------------------------------------------------------------------|--------|------------------------|-------------|--------|------------------------|--------|
| ASSETS                                                                                   |   |
|                                                                                     |   |                   |        |   |                   |   |
| CURRENT      ASSETS                                                                      |   |                   |        |   |                   |   |
| Cash                                                                                     |   | $                      | 1,089,456   |   |                   | $      | 1,763,998 |   |
| Other      receivable                                                                    |   |                   | 3,425       |   |                   |   | 2,838 |   |
| Prepaid      expenses and deposits                                                       |   |                   | 12,037      |   |                   |   | 5,375 |   |
|                                                                                     |   |                   |        |   |                   |   |   |   |
|                                                                                     |   |                   | 1,104,918   |   |                   |   | 1,772,211 |   |
|                                                                                     |   |                   |        |   |                   |   |   |   |
| Oil      and gas properties, full cost method, unproven                                  |   |                   | 16,456,220  |   |                   |   | 23,081,129 |   |
|                                                                                     |   |                   |        |   |                   |   |   |   |
| Deposit      on acquisition                                                              |   |                   | -           |   |                   |   | 639,487 |   |
|                                                                                     |   |                   |        |   |                   |   |   |   |
| Total      Assets                                                                        |   | $                      | 17,561,138  |   |                   | $      | 25,492,827 |   |
|                                                                                     |   |                   |        |   |                   |   |   |   |
|                                                                                     |   |                   |        |   |                   |   |   |   |
| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                |   |
|                                                                                     |   |                   |        |   |                   |   |   |   |
| CURRENT      LIABILITIES                                                                 |   |                   |        |   |                   |   |   |   |
| Accounts      payable and accrued liabilities                                            |   | $                      | 270,674     |   |                   | $      | 175,351 |   |
| Loans      payable                                                                       |   |                   | -           |   |                   |   | 259,343 |   |
| Due      to related parties                                                              |   |                   | -           |   |                   |   | 1,572,803 |   |
|                                                                                     |   |                   |        |   |                   |   |   |   |
|                                                                                     |   |                   | 270,674     |   |                   |   | 2,007,497 |   |
|                                                                                     |   |                   |        |   |                   |   |   |   |
| Deferred      tax liability                                                              |   |                   | 4,191,070   |   |                   |   | 5,086,156 |   |
|                                                                                     |   |                   |        |   |                   |   |   |   |
| Total      Liabilities                                                                   |   |                   | 4,461,744   |   |                   |   | 7,093,653 |   |
|                                                                                     |   |                   |        |   |                   |   |   |   |
| STOCKHOLDERS'      EQUITY                                                                |   |                   |        |   |                   |   |   |   |
| Authorized:                                                                              |   |                   |        |   |                   |   |   |   |
|     10,000,000      preferred shares, par value $0.001 per share     |   |                   |        |   |                   |   |   |   |
|     150,000,000      common shares, par value $0.001 per share       |   |                   |        |   |                   |   |   |   |
| Issued      and outstanding :                                                            |   |                   |        |   |                   |   |   |   |
|     107,237,820      common shares (95,159,065 at December 31, 2008) |   |                   | 107,238     |   |                   |   | 95,159 |   |
| Additional      paid in capital                                                          |   |                   | 23,806,998  |   |                   |   | 20,464,301 |   |
| Accumulated      other comprehensive income (loss)                                       |   |                   | (2,926      | )      |                   |   | 1,614 |   |
| Deficit      accumulated during the exploration stage                                    |   |                   | (10,811,916 | )      |                   |   | (2,161,900 | ) |
|                                                                                     |   |                   |        |   |                   |   |   |   |
| Total      Stockholders' Equity                                                          |   |                   | 13,099,394  |   |                   |   | 18,399,174 |   |
|                                                                                     |   |                   |        |   |                   |   |   |   |
| Total      Liabilities and Stockholders' Equity                                          |   | $                      | 17,561,138  |   |                   | $      | 25,492,827 |   |

----

|                                                              |   |                     |        |   |                         |   |        |   |   |
|-------------------------------------------------------------------|--------|--------------------------|-------------|--------|------------------------------|--------|-------------|--------|--------|
|                                                              |   | Cumulative      results  |        |   |                         |   |        |   |   |
|                                                              |   | from      May 5, 2006 to |        |   | Year      Ended December 31, |   |
|                                                              |   | December      31, 2009   |        |   | 2009                         |   |        | 2008   |   |
|                                                              |   |                     |        |   |                         |   |        |   |   |
| CONTINUING      OPERATIONS                                        |   |                     |        |   |                         |   |        |   |   |
| Consulting                                                        |   | $                        | 928,353     |   |                         | $      | 492,576     |   |   | $ | 304,907 |   |
| Foreign      exchange (gain)/loss                                 |   |                     | 271,347     |   |                         |   | 1,355,095   |   |   |   | (1,091,047 | ) |
| (Gain)      loss on settlement of debt                            |   |                     | (40,026     | )      |                         |   | (1,963      | )      |   |   | (38,063 | ) |
| Management      and directors fees                                |   |                     | 670,075     |   |                         |   | 295,075     |   |   |   | 375,000 |   |
| Stock-based      compensation expense                             |   |                     | 1,143,377   |   |                         |   | 1,143,377   |   |   |   | - |   |
| Office,      travel and general                                   |   |                     | 457,012     |   |                         |   | 68,244      |   |   |   | 201,820 |   |
|  Professional      fees                                      |   |                     | 472,243     |   |                         |   | 145,512     |   |   |   | 167,026 |   |
| Salaries,      wages, and benefits                                |   |                     | 86,666      |   |                         |   | -           |   |   |   | - |   |
|                                                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
| General  and      Administrative Expenses               |   |                     | (3,989,047  | )      |                         |   | (3,497,916  | )      |   |   | 80,357 |   |
|                                                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
| Oil      & gas property impairment                            |   |                     | (7,396,207  | )      |                         |   | (7,396,207  | )      |   |   | - |   |
| Deferred      income tax recovery                                 |   |                     | 2,244,107   |   |                         |   | 2,244,107   |   |   |   | - |   |
|                                                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
|    Income      (loss) from Continuing Operations   |   |                     | (9,141,147  | )      |                         |   | (8,650,016  | )      |   |   | 80,357 |   |
|                                                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
| DISCONTINUED      OPERATIONS                                      |   |                     |        |   |                         |   |        |   |   |   |   |   |
| Net      Loss from Discontinued Operations                        |   |                     | (2,454,637  | )      |                         |   | -           |   |   |   | (55,903 | ) |
|  Gain      on Disposal of Endeavor                           |   |                     | 783,868     |   |                         |   | -           |   |   |   | 783,868 |   |
|                                                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
|    Income      (loss) from Discontinued Operations |   |                     | (1,670,769  | )      |                         |   | -           |   |   |   | 727,965 |   |
|                                                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
|                                                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
| NET      INCOME (LOSS)                                            |   | $                        | (10,811,916 | )      |                         | $      | (8,650,016  | )      |   | $ | 808,322 |   |
|                                                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
|                                                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
| BASIC      AND DILUTED NET (LOSS) INCOME FROM                     |   |                     |        |   |                         |   |        |   |   |   |   |   |
|   CONTINUING      OPERATIONS PER COMMON SHARE           |   |                     |        |   |                         | $      | (0.09       | )      |   | $ | (0.00 | ) |
|                                                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
| BASIC      AND DILUTED NET LOSS FROM                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
|   DISCONTINUED      OPERATIONS PER COMMON SHARE         |   |                     |        |   |                         | $      | (0.00       | )      |   | $ | 0.01 |   |
|                                                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
| BASIC      AND DILUTED NET (LOSS) INCOME                          |   |                     |        |   |                         |   |        |   |   |   |   |   |
|  PER      COMMON SHARE                                       |   |                     |        |   |                         | $      | (0.09       | )      |   | $ | 0.01 |   |
|                                                              |   |                     |        |   |                         |   |        |   |   |   |   |   |
| WEIGHTED      AVERAGE NUMBER OF BASIC AND                         |   |                     |        |   |                         |   |        |   |   |   |   |   |
|   DILUTED      COMMON SHARES OUTSTANDING                |   |                     |        |   |                         |   | 100,842,265 |   |   |   | 85,860,458 |   |

----

|                                                                                                      |   | Cumulative      results  |        |   |                   |   |       |                   |   |
|-----------------------------------------------------------------------------------------------------------|--------|--------------------------|-------------|--------|------------------------|--------|------------|------------------------|--------|
|                                                                                                      |   | from      May 5, 2006 to |        |   | Year      Ended        |   |
|                                                                                                      |   | December.      31, 2009  |        |   | December      31, 2009 |   |       | December      31, 2008 |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |
| OPERATING      ACTIVITIES                                                                                 |   |                     |        |   |                   |   |       |                   |   |
| Net      (loss) income                                                                                    |   | $                        | (10,811,916 | )      |                   | $      | (8,650,016 | )                      |   | $ | 808,322 |   |
| Adjustments      to reconcile net (loss) income to net cash                                               |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| used      in operating activities:                                                                        |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| Cash      used by discontinued operations                                                                 |   |                     | 1,729,701   |   |                   |   | -          |                   |   |   | 29,135 |   |
| Gain      on disposal of Endeavor                                                                         |   |                     | (783,868    | )      |                   |   | -          |                   |   |   | (783,868 | ) |
| Gain      from settlement of indebtedness                                                                 |   |                     | (65,026     | )      |                   |   | (1,963     | )                      |   |   | (63,062 | ) |
| Stock-based      compensation and fee payments                                                            |   |                     | 1,659,627   |   |                   |   | 1,459,627  |                   |   |   | 200,000 |   |
| Unrealized      foreign exchange (gain) loss                                                              |   |                     | 227,835     |   |                   |   | 1,356,441  |                   |   |   | (1,091,048 | ) |
| Impairment      of oil and gas properties (net of tax recovery)                                           |   |                     | 5,152,100   |   |                   |   | 5,152,100  |                   |   |   | - |   |
| Changes      in non-cash working capital items                                                            |   |                     |        |   |                   |   |       |                   |   |   |   |   |
|            Other      receivable                   |   |                     | (3,425      | )      |                   |   | (588       | )                      |   |   | (2,838 | ) |
|            Prepaid      expenses and deposits      |   |                     | (12,037     | )      |                   |   | (6,661     | )                      |   |   | (5,375 | ) |
|           Accounts      payable and accrued liabilities |   |                     | 445,825     |   |                   |   | 95,324     |                   |   |   | 5,650 |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| Cash      used in operations                                                                              |   |                     | (2,461,184  | )      |                   |   | (595,736   | )                      |   |   | (903,084 | ) |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| FINANCING      ACTIVITIES                                                                                 |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| Financing      activities from discontinued operations                                                    |   |                     | 2,000,261   |   |                   |   | -          |                   |   |   | - |   |
|    Common      stock issued for cash                                                       |   |                     | 3,325,001   |   |                   |   | 893,000    |                   |   |   | 2,372,000 |   |
|    Loans      payable                                                                      |   |                     | 50,567      |   |                   |   | -          |                   |   |   | (35,100 | ) |
|         Due to related parties                                                                  |   |                     | 1,343,831   |   |                   |   | (840,000   | )                      |   |   | 1,025,415 |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| Cash      provided by financing activities                                                                |   |                     | 6,719,660   |   |                   |   | 53,000     |                   |   |   | 3,362,315 |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| INVESTING      ACTIVITIES                                                                                 |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| Investing      Activities from discontinued operations                                                    |   |                     | (1,447,739  | )      |                   |   | -          |                   |   |   | - |   |
|         Petroleum and natural gas expenditures                                                  |   |                     | (1,094,490  | )      |                   |   | (131,806   | )                      |   |   | (695,233 | ) |
|         Cash acquired on acquisition                                                            |   |                     | 12,696      |   |                   |   | -          |                   |   |   | - |   |
|         Deposit on acquisition                                                                  |   |                     | (639,487    | )      |                   |   | -          |                   |   |   | - |   |
|    Deposits                                                                                |   |                     | -           |   |                   |   | -          |                   |   |   | - |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| Cash      used in investing activities                                                                    |   |                     | (3,169,020  | )      |                   |   | (131,806   | )                      |   |   | (695,233 | ) |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| CHANGE      IN CASH                                                                                       |   |                     | 1,089,456   |   |                   |   | (674,542   | )                      |   |   | 1,763,998 |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| CASH,      BEGINNING                                                                                      |   |                     | -           |   |                   |   | 1,763,998  |                   |   |   | - |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| CASH,      ENDING                                                                                         |   | $                        | 1,089,456   |   |                   | $      | 1,089,456  |                   |   | $ | 1,763,998 |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| SUPPLEMENTAL      DISCLOSURE:                                                                             |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| Interest      paid                                                                                        |   | $                        | 9,908       |   |                   | $      | -          |                   |   | $ | - |   |
| Income      taxes paid                                                                                    |   | $                        | -           |   |                   | $      | -          |                   |   | $ | - |   |
|                                                                                                      |   |                     |        |   |                   |   |       |                   |   |   |   |   |
| NON-CASH      ACTIVITIES:                                                                                 |   |                     |        |   |                   |   |       |                   |   |   |   |   |
|  Shares      issued on conversion of management fees                                                 |   | $                        | 200,000     |   |                   | $      | -          |                   |   | $ | 200,000 |   |
|  Shares      issued on conversion of liabilities                                                     |   | $                        | 2,641,879   |   |                   | $      | 1,002,146  |                   |   | $ | - |   |
|   Shares      issued for property acquired                                                      |   | $                        | 15,903,000  |   |                   | $      | -          |                   |   | $ | - |   |

----

|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       | Deficit     |   |    |          |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------|-------------|--------|-----------------------|---------|---------|----------------|--------|--------|------------|--------|--------|--------------|--------|--------|---------------|---------|------------|-------------|--------|---------|---------------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   | Accumulated   |    |       |        |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | Common      Shares |        |   | Preferred      Shares |    |    | Additional     |   |   |       |   |   | During       |   |   | Total         |    |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | Number             |        |   |                  |    |    | Number         |   |   |       |   |   | Paid      In |   |   | Comprehensive |    |       | Exploration |   |    | Stockholders' |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | of      Shares     |        |   | Amount                |    |    | of      Shares |   |   | Amount     |   |   | Capital      |   |   | Income/(Loss) |    |       | Stage       |   |    | Equity        |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |
| Issuance      of common shares to                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |
|    to      founder, May 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |               | 100         |   |                  | $       | 1       |           |   |   | -          |   |   | $            | -      |   |          | $       | -          |        |   | $       | -             |   |   | $ | - |   |   | $ | 1 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Foreign      currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    | 13,987        |   |   |   |   |   |   |   | 13,987 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Net      loss for the 8 month period ended                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
|   December      31, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |               | -           |   |                  |    | -       |           |   |   | -          |   |   |         | -      |   |          |    | -          |        |   |    |          |   |   |   | (1,462,407 | ) |   |   | (1,462,407 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2006                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |               | 100         |   |                  |    | 1       |           |   |   | -          |   |   |         | -      |   |          |    | -          |        |   |    | 13,987        |   |   |   | (1,462,407 | ) |   |   | (1,448,419 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Issued      by the Company on acquisition of                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
|   ECC      in August 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |               |        |   |                  |    | -       |           |   |   | 9,000      |   |   |         | 9      |   |          |    | -          |        |   |    | -             |   |   |   | - |   |   |   | 9 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Issued      by FEH on acquisition of ECC in                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
|    August,      2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |               | -           |   |                  |    | -       |           |   |   | 9,000,000  |   |   |         | 9,000  |   |          |    | (9,000     | )           |   |    | -             |   |   |   | - |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Adjustment      to give effect to acquisition of ECC                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
|   in      August, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |               | 61,466,203  |   |                  |    | 61,466  |           |   |   | -          |   |   |         | -      |   |          |    | 329,766    |        |   |    | -             |   |   |   | - |   |   |   | 391,232 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Shares      of ECC acquired by legal parent                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |               | (100        | )      |                  |    | (1      | )              |   |   | -          |   |   |         | -      |   |          |    | -          |        |   |    | -             |   |   |   | - |   |   |   | (1 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Issued      at $1.50 per share in August 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
|   on      conversion of ECC debentures                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |               | 1,093,155   |   |                  |    | 1,093   |           |   |   | -          |   |   |         | -      |   |          |    | 1,638,640  |        |   |    | -             |   |   |   | - |   |   |   | 1,639,733 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Issued      for cash at $1.00 per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |               | 60,000      |   |                  |    | 60      |           |   |   | -          |   |   |         | -      |   |          |    | 59,940     |        |   |    | -             |   |   |   | - |   |   |   | 60,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Issued      for property at $0.86 per share                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |               | 18,600,000  |   |                  |    | 18,600  |           |   |   | -          |   |   |         | -      |   |          |    | 15,884,400 |        |   |    | -             |   |   |   | - |   |   |   | 15,903,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Foreign      currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    | (44,857       | )      |   |   |   |   |   |   | (44,857 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Net      loss for the year ended                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
|   December      31, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |               | -           |   |                  |    | -       |           |   |   | -          |   |   |         | -      |   |          |    | -          |        |   |    | -             |   |   |   | (1,507,745 | ) |   |   | (1,507,745 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2007                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |               | 81,219,358  |   |                  | $       | 81,219  |           |   |   | 9,009,000  |   |   | $            | 9,009  |   |          | $       | 17,903,746 |        |   | $       | (30,870       | )      |   | $ | (2,970,152 | ) |   | $ | 14,992,952 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Write      Off Accumulated Comprehensive Income from ECC operations to      Extraordinary Gain                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    | 31,265        |   |   |   | (70 | ) |   |   | 31,195 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Preferred      shares cancelled by the Company on divestiture of ECC February      2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |               |        |   |                  |    |    |           |   |   | (6,500     | )      |   |         | (6     | )      |          |    |       |        |   |    |          |   |   |   |   |   |   |   | (6 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Prefrerred      shares cancelled by FEH on                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
|    divestiture      of ECC February 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |               |        |   |                  |    |    |           |   |   | (6,500,000 | )      |   |         | (6,500 | )      |          |    |       |        |   |    |          |   |   |   |   |   |   |   | (6,500 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Conversion      of preferred shares to common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |               | 2,502,500   |   |                  |    | 2,503   |           |   |   | (2,502,500 | )      |   |         | (2,503 | )      |          |    |       |        |   |    |          |   |   |   |   |   |   |   | - |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Investment      Units issued for cash at $0.30 per unit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |               | 2,766,668   |   |                  |    | 2,767   |           |   |   |       |   |   |         |   |   |          |    | 744,233    |        |   |    |          |   |   |   |   |   |   |   | 747,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Investment      Units issued for cash at $0.255 per unit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |               | 6,664,706   |   |                  |    | 6,664   |           |   |   |       |   |   |         |   |   |          |    | 1,618,335  |        |   |    |          |   |   |   |   |   |   |   | 1,624,999 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Management      fees converted to common stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |               | 2,005,833   |   |                  |    | 2,006   |           |   |   |       |   |   |         |   |   |          |    | 197,987    |        |   |    |          |   |   |   |   |   |   |   | 199,993 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Foreign      currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    | 1,219         |   |   |   |   |   |   |   | 1,219 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Net      income for the year ended                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
|   December      31, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |               | -           |   |                  |    | -       |           |   |   | -          |   |   |         | -      |   |          |    | -          |        |   |    | -             |   |   |   | 808,322 |   |   |   | 808,322 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2008                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |               | 95,159,065  |   |                  |    | 95,159  |           |   |   | -          |   |   |         | -      |   |          |    | 20,464,301 |        |   |    | 1,614         |   |   |   | (2,161,900 | ) |   |   | 18,399,174 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Conversion      of indebtedness to commmon stock                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |               | 9,385,935   |   |                  |    | 9,386   |           |   |   | -          |   |   |         | -      |   |          |    | 929,207    |        |   |    |          |   |   |   |   |   |   |   | 938,593 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Issued      for services                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |               | 700,000     |   |                  |    | 700     |           |   |   | -          |   |   |         | -      |   |          |    | 315,550    |        |   |    |          |   |   |   |   |   |   |   | 316,250 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Stock-based      compensation granted                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   |               | -           |   |                  |    | -       |           |   |   | -          |   |   |         | -      |   |          |    | 1,143,379  |        |   |    |          |   |   |   |   |   |   |   | 1,143,379 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Investment      units issued for cash at $0.48 per unit                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |   |               | 1,860,416   |   |                  |    | 1,860   |           |   |   | -          |   |   |         | -      |   |          |    | 891,140    |        |   |    |          |   |   |   |   |   |   |   | 893,000 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Conversion      of indebtedness to investment units                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   |               | 132,404     |   |                  |    | 133     |           |   |   | -          |   |   |         | -      |   |          |    | 63,421     |        |   |    |          |   |   |   |   |   |   |   | 63,554 |   |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Foreign      currency translation                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    | (4,540        | )      |   |   |   |   |   |   | (4,540 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Net      loss for the year ended                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
|   December      31, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |               | -           |   |                  |    | -       |           |   |   | -          |   |   |         | -      |   |          |    | -          |        |   |    |          |   |   |   | (8,650,016 | ) |   |   | (8,650,016 | ) |
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |
| Balance,      December 31, 2009                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  |   |               | 107,237,820 |   |                  |  $ | 107,238 |           |   |   | -          |   |   |  $      | -      |   |          |  $ | 23,806,998 |        |   |  $ | (2,926        | )      |   |  $ | (10,811,916 | ) |   |  $ | 13,099,394 |   |
|                                                                                                  |   |               |        |   |                  |    |    |           |   |   |       |   |   |         |   |   |          |    |       |        |   |    |          |   |   |   |   |   |   |   |   |   |

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| 1. | NATURE      AND CONTINUANCE OF OPERATIONS |
|----|-------------------------------------------|

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| Equipment      is recorded at historical cost.  The declining-balance method of      depreciation is used for the assets at the following annual      rates: |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Computer      equipment      | 45 | % |
|------------------------------|----|---|
| Furniture      and Equipment | 20 | % |

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| Net      liabilities of Endeavor:                                          |   |   |       |   |
|----------------------------------------------------------------------------|--------|--------|------------|--------|
| Assets                                                                     |   | $      | (780,467   | )      |
| Liabilities,      including $351,504 in amounts payable to related parties |   |   | 3,401,781  |   |
| Accumulated      comprehensive income                                      |   |   | (31,265    | )      |
| Carrying      value                                                        |   |   | 2,590,049  |   |
| Share      consideration received                                          |   |   | 6,507      |   |
| Intercompany      receivables written off                                  |   |   | (1,812,688 | )      |
| Gain      on disposal of discontinued operations                           |   | $      | 783,868    |   |

| Australian Exploration Properties -      Unproven |   |   |           |
|---------------------------------------------------|--------|--------|----------------|
| Balance,      December 31, 2006                   |   | $      | –– |   |
| Acquisition      costs                            |   |   | 15,903,000     |   |
| Impact      of deferred tax liability             |   |   | 6,177,000      |   |
| Exploration      costs                            |   |   | 290,925        |   |
| Balance,      December 31, 2007                   |   |   | 22,370,925     |   |
| Exploration      Costs                            |   |   | 710,204        |   |
| Balance,      December 31, 2008                   |   |   | 23,081,129     |   |
| Write      down – Barrow                    |   |   | (2,908,010     | ) |
| Write      down – Vic P60                   |   |   | (2,212,197     | ) |
| Write      down – Deferred tax gross-ups    |   |   | (1,636,508     | ) |
| Exploration      Costs                            |   |   | 131,806        |   |
| Balance,      December 31, 2009                   |   | $      | 16,456,220     |   |

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|   | ● | Fund      the costs required to drill, and if warranted, complete three wells on the      PEL 112 within the timeframes required  by the permit work      programs; and |
|--------|---------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | ● | Pay      the Company a 1.33% overriding royalty on gross revenues generated from      the sale of any oil or gas produced from wells drilled on the PEL      112. |
|--------|---------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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|                                                           |   | December      31,2009 |           |   | December      31,2008 |   |
|----------------------------------------------------------------|--------|-----------------------|----------------|--------|-----------------------|--------|
| Non-interest      bearing loan, unsecured, payable upon demand |   |                  | –– |   |                  |   | 259,343 |   |
|                                                           |   | $                     | –– |   |                  | $      | 259,343 |   |

|                                                                                        |   | December      31,2009 |           |   | December      31,2008 |   |
|---------------------------------------------------------------------------------------------|--------|-----------------------|----------------|--------|-----------------------|--------|
| Advances      from a company affiliated with the president and chief executive      officer |   | $                     | –– |   |                  | $      | 74,729 |   |
| Advances      from shareholders / directors                                                 |   |                  | –– |   |                  |   | 243,553 |   |
| Advances      from Shareholder                                                              |   |                  | –– |   |                  |   | 1,254,521 |   |
|                                                                                        |   | $                     | –– |   |                  | $      | 1,572,803 |   |

| Number of      SharesIssuable      UponExercise      of Option |   | ExercisePrice |   |  VestingPeriod |   | First      DateExercisable |   | ExpirationDate |
|---------------------------------------------------------------------|--------|---------------|--------|---------------------|--------|----------------------------|--------|----------------|
| 1,200,000                                                           |   | $0.70         |   | None                |   | 8/15/2009                  |   | 8/15/2012      |
| 1,200,000                                                           |   | $0.80         |   | 1      Year         |   | 8/15/2010                  |   | 8/15/2012      |
| 1,200,000                                                           |   | $1.00         |   | 1      Year         |   | 8/15/2010                  |   | 8/15/2014      |
| 1,200,000                                                           |   | $1.20         |   | 2      Years        |   | 8/15/2011                  |   | 8/15/2014      |
| 4,800,000                                                           |   |          |   |                |   |                       |   |           |

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| Options                                    |   | Shares(000) |           |   |  Weighted-AverageExercise      Price |   |           | Weighted-AverageRemaining      Contract Term (yrs) |   |   | Aggregate      Intrinsic value |   |
|--------------------------------------------|--------|-------------|----------------|--------|-------------------------------------------|--------|----------------|----------------------------------------------------|--------|--------|--------------------------------|--------|
| Outstanding      – January 1, 2009   |   |        | –– |   |                                      |   | –– |                                               |   |   |                           |   |   |   |
| Granted                                    |   |        | 4,800          |   |                                      | $      | 0.93           |                                               |   |   |                           |   |   |   |
| Exercised                                  |   |        | –– |   |                                      |   | –– |                                               |   |   |                           |   |   |   |
| Forfeited      or expired                  |   |        | –– |   |                                      |   | –– |                                               |   |   |                           |   |   |   |
| Outstanding      – December 31, 2009 |   |        | 4,800          |   |                                      | $      | 0.93           |                                               |   |   | 3.71                           |   |   | $ | 0.00 |   |
| Exercisable      – December 31, 2009 |   |        | 1,200          |   |                                      | $      | 0.70           |                                               |   |   | 2.71                           |   |   | $ | 0.00 |   |

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|                                                            |   | Year      EndedDecember      31,2009 |       |   | Year      EndedDecember      312008 |   |
|-----------------------------------------------------------------|--------|--------------------------------------|------------|--------|-------------------------------------|--------|
| Statutory      tax rates                                        |   |                                 | 35         | %      |                                |   | 35 | % |
| Expected      recovery of income taxes at statutory rates       |   | $                                    | (3,812,944 | )      |                                | $      | 274,251 |   |
| Increase      (reduction) in income taxes resulting from:       |   |                                 |       |   |                                |   |   |   |
|   Non-deductible      expenditures and other          |   |                                 | 865,889    |   |                                |   | (317,498 | ) |
|   Foreign      exchange rate and tax rate differences |   |                                 | 374,017    |   |                                |   | (78,676 | ) |
|   Valuation      allowance change                     |   |                                 | 328,931    |   |                                |   | 121,923 |   |
|     Provision      for income taxes         |   | $                                    | (2,244,107 | )      |                                | $      | –– |   |

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|                                                 |   | Year      EndedDecember      31,2009 |       |   | Year      EndedDecember      31,2008 |   |
|------------------------------------------------------|--------|--------------------------------------|------------|--------|--------------------------------------|--------|
| Deferred      income tax assets:                     |   |                                 |       |   |                                 |   |
| US      net operating loss carryforwards             |   | $                                    | 863,061    |   |                                 | $      | 534,130 |   |
| Australian      operating loss carryforwards         |   |                                 | 59,898     |   |                                 |   | 28,885 |   |
| Australian      deposits on property                 |   |                                 | 191,846    |   |                                 |   | –– |   |
| US      loan receivable                              |   |                                 | 543,806    |   |                                 |   | 543,806 |   |
| Total      deferred income tax assets                |   |                                 | 1,658,611  |   |                                 |   | 1,106,821 |   |
|   Less:      valuation allowance           |   |                                 | (1,406,867 | )      |                                 |   | (1,077,936 | ) |
| Deferred      income tax assets, net                 |   | $                                    | 251,744    |   |                                 | $      | 28,885 |   |
| Petroleum      and natural gas properties, Australia |   | $                                    | (4,442,814 | )      |                                 | $      | (5,115,041 | ) |
| Deferred      income tax liabilities, net            |   | $                                    | (4,191,070 | )      |                                 | $      | (5,086,156 | ) |

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